May 122019
 
 May 12, 2019  Posted by at 9:36 am Finance Tagged with: , , , , , , , , , , , ,  


Robert Campin Portrait of a woman 1430-35

 

Brexit Party May Get More EU Election Votes Than Tories, Labour Combined (G.)
Fight To Replace PM May Complicating Brexit Talks – Labour’s McDonnell (R.)
Labour Would Trial Universal Basic Income If Elected – McDonnell (G.)
QE Party Over, Bank of Japan Stealth-Tapers Further (WS)
The World’s Dictatress (Hornberger)
Is America Ready for John Bolton’s War With Iran? (Ritter)
Iran’s Rouhani Warns Of Greater Hardship Than War Years Of 1980s (R.)
Guaido Seeks Pentagon Cooperation In Attempt To Take Power (AP)
Boeing Altered Key Switches In 737 MAX Cockpit (ST)
Assange’s Prison Conditions (Press Project)
American Mom Today 50% More Likely To Die In Childbirth Than Her Own Mother (AP)

 

 

“Poll surge for Farage sparks panic among Tories and Labour..”

Brexit Party May Get More EU Election Votes Than Tories, Labour Combined (G.)

Nigel Farage’s Brexit party is on course to secure more support at the European elections than the Tories and Labour combined, according to the latest Opinium poll for the Observer. In the most striking sign to date of surging support for Farage, the poll suggests more than a third of voters will back him on 23 May. It puts his party on 34% of the vote, with less than a fortnight before the election takes place. The poll suggests support for the Conservatives has collapsed amid the Brexit uncertainty, with Theresa May’s party on just 11%. Labour is a distant second, on 21%. The Lib Dems perform the best of any of the openly anti-Brexit parties, one point ahead of the Tories on 12% of the vote.

With the Brexit party securing more than three times the level of support for the Tories, the poll confirms the concerns of senior Conservatives that it is haemorrhaging support as Brexit remains unresolved. Just a fortnight ago, the Brexit party was neck-and-neck with Labour on 28%. Now it has a 13-point lead over Jeremy Corbyn’s party. The Conservatives are now only narrowly ahead of the Brexit party when voters are asked who they would vote for at a general election. The Tories are on 22% support, down 4% on a fortnight ago, with the Brexit party on 21% backing. Labour leads on 28%, but is down five points on the last poll.

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“The problem they have is that literally in front of us they will fall out,” he told the Sunday Mirror. “So the exercise here is holding themselves together. And that is proving impossible. The administration is falling apart.”

Fight To Replace PM May Complicating Brexit Talks – Labour’s McDonnell (R.)

The battle among leading Conservatives to replace Theresa May as prime minister threatens to derail talks with the Labour Party and the bid to find a Brexit compromise, Labour’s John McDonnell said. May, who has offered to quit if MPs accept her Brexit deal, opened cross-party talks with Jeremy Corbyn’s Labour Party more than a month ago after parliament rejected her European Union withdrawal deal three times. The talks with Labour are a last resort for May, whose party’s deep divisions over Brexit have so far stopped her getting approval for an exit agreement and left the world’s fifth largest economy in prolonged political limbo.


McDonnell, Labour’s financial spokesman and a member of the party’s negotiating team, said the situation was precarious. “The problem they have is that literally in front of us they will fall out,” he told the Sunday Mirror. “So the exercise here is holding themselves together. And that is proving impossible. The administration is falling apart.” In terms of progress, the second most powerful man in the Labour Party said nothing new had been put on the table, and in some cases the talks had gone backwards. “It’s so precarious. We’re dealing with an institution that might not be there in three weeks.” He said the talks had been made more difficult by May’s offer to resign because a new leader could rip up anything agreed by the current administration.

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Universal in Sheffield?

Labour Would Trial Universal Basic Income If Elected – McDonnell (G.)

Labour would trial universal basic income if it wins power, shadow chancellor John McDonnell has revealed. Pilot schemes would be held in Liverpool, Sheffield and the Midlands, McDonnell told the Mirror. The plan would do away with the need for welfare as every citizen would be given a fixed sum to cover the basics whether they are rich or poor, in work or unemployed. McDonnell said people can spend the money how they like, but it is intended for study, to set up a business or leave work to care for a loved one. “I’d like to see a northern and Midlands town in the pilot so we have a spread,” he said.

“I would like Liverpool – of course I would, I’m a Scouser – but Sheffield have really worked hard. I’ve been involved in their anti-poverty campaign and they’ve done a lot round the real living wage. I think those two cities would be ideal and somewhere in the Midlands.” Trials have been held elsewhere in the world, including Kenya, Finland and the US, as well as potentially being explored in four Scottish cities. The shadow chancellor was this week handed a feasibility report for different universal basic income (UBI) models for low-income areas, including one in which a whole community gets basic incomes.

All the means-tested benefits – apart from housing benefit – would be taken away and every adult would get a fixed amount per week, plus an additional amount for each child they have. “Of course it’s a radical idea,” McDonnell said. “But I can remember, when I was at the trade unions – campaigning for child benefit and that’s almost like UBI – you get a universal amount of money just based on having a child. “UBI shares that concept. It’s about winning the argument and getting the design right.” The concept has been around since at least the 1960s and was raised in the 1972 US presidential election, followed by the introduction of a UBI scheme called the Manitoba Basic Income Experiment in Canada in 1975.

[..] McDonnell is convinced of the benefits. “The reason we’re doing it is because the social security system has collapsed. We need a radical alternative and we’re going to examine that. “We’ll look at options, run the pilots and see if we can roll it out. If you look at the Finland pilot it says it didn’t do much in terms of employment but did in terms of wellbeing – things like health. It was quite remarkable. “The other thing it did was increase trust in politicians, which can’t be a bad thing.”

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But the central banks has become the whole economy..

QE Party Over, Bank of Japan Stealth-Tapers Further (WS)

Total assets on the balance sheet of the Bank of Japan at the end of April ticked up from March but were flat with the record in February: ¥562 trillion ($5.1 trillion). This amounts to a gigantic 102.2% of nominal GDP. But the BOJ has been tapering its asset purchases since peak QE at the end of 2016, and the growth has slowed to a snail’s pace, by Abenomics QE standards. Despite the BOJs repeated promises of adding ¥85 trillion to its balance sheet every year, the BOJ hasn’t done that since peak QE in 2016 when it added ¥93 trillion. The additions have consistently decreased since then. Over the 12 months through April, it has added merely €27 trillion, the lowest 12-month increase since early days of ramping up Abenomics in March 2013. This amounts to a stealth taper:

Meanwhile, the government of Japan has been borrowing and issuing new debt with reckless abandon, and the gross national debt outstanding has ballooned to ¥1.12 quadrillion, or 203% of nominal GDP (measured in yen). But no problem: the BOJ started buying every Japanese government security that wasn’t nailed down, with the government selling new securities to the banks, and the banks selling them to the BOJ for a small profit. In addition the BOJ mopped up what was coming on the market. The BOJ now holds 43% of all outstanding Japanese government securities, up from 25% in January 2015. These massive purchases of Japanese government securities, and to a lesser extent, the purchases of corporate bonds, equity ETFs, and Japan REITS, have created this enormous balance sheet, but note the flattening spot at the top, a result of the stealth taper:

The stealth taper has reached a level to where the assets added to the balance sheet are small enough that every third month, as long-term securities mature and roll off the balance sheet, the balance sheet shrinks. Then the next two months, the balance sheet gains:

To smoothen out this volatility of the balance sheet and delineate the trend of the stealth taper more clearly, I converted that above data of month-to-month change into a rolling three-month average. The addition in assets over the past six months was ¥1.7 trillion a month on average:

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John Quincy Adams. A bit wiser than Mike Pompeo.

The World’s Dictatress (Hornberger)

In his Fourth of July address to Congress in 1821, U.S. Secretary of State John Quincy Adams stated that if America were ever to abandon its founding foreign policy of non-interventionism, she would inevitably become the world’s “dictatress” and begin behaving accordingly. No can can deny that Adams’ prediction has come true. America has truly become the world’s dictatress — an arrogant, ruthless, brutal dictatress that brooks no dissent from anyone in the world. Now, I use the term “America” because that’s the term Adams used. In actuality, however, it’s not America that has become the world’s dictatress. It is the U.S. government that has become the world’s dictatress.

A good example of this phenomenon involves Meng Wanzhou, a Chinese citizen who serves as chief financial officer of the giant Chinese technology firm Huawei. Having been arrested by Canadian authorities and placed under house arrest, Meng is suffering the wrath of the world’s dictatress. What is her purported crime? That she violated U.S. sanctions against Iran. What do U.S. sanctions on Iran have to do with her? Exactly! She’s a Chinese citizen, not an American citizen. So, why is she being prosecuted by the U.S. government? Sanctions have become a standard tool of U.S. foreign policy. With the exception of libertarians, hardly anyone raises an eyebrow over their imposition and enforcement.

Their objective is to target foreign citizens with death, suffering, and economic privation as a way to bend their regime to the will of the U.S. dictratress and her brutal and ruthless agents. After all, what could be more brutal and ruthless than to target innocent people with death and impoverishment as a way to get to their government? Most foreign citizens have as little control over the actions of their government as individual American citizens have over the actions of their government. Where is the morality in targeting innocent people, especially as a way to achieve a political goal? Isn’t that why people condemn terrorism?

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“.. it is John Bolton, not Iran, who poses the greatest threat to American national security today.”

Is America Ready for John Bolton’s War With Iran? (Ritter)

The threat being promulgated by Bolton, CENTCOM, Pompeo, and the media ignores the reality that Iran has been preparing to strike American military forces in the Middle East for years as part of its efforts towards self-defense. Iran’s short-range ballistic missile capability is part of a larger missile threat that could, at a moment’s notice, blanket U.S. bases in the region with high explosives. Dispatching the Abraham Lincoln battle group and a B-52 task force to the Middle East is an act of theatrical bravado that will do nothing to change that. Iran’s missile force is, for the most part, mobile. The American experience in the Gulf War, and Saudi Arabia’s experience in Yemen, should underscore the reality that mobile relocatable targets such as Iran’s missile arsenal are virtually impossible to interdict through airpower.


By purposefully escalating tensions with Iran using manufactured intelligence about an all too real threat, Bolton is setting the country up for a war it is not prepared to fight and most likely cannot win. This point is driven home by the fact that Mike Pompeo has been recalled from his trip to participate in a National Security Council meeting where the Pentagon will lay out in stark detail the realities of a military conflict with Iran, including the high costs. (Hopefully, they’ll emphasize that Iran would win such a war simply by not losing—all they’d have to do is ride out any American attack.) That Israel is behind the scenes supplying the intelligence and motivation makes Bolton’s actions even more questionable. It shows that it is John Bolton, not Iran, who poses the greatest threat to American national security today.

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The US must still be smart enough to understand it can only lose.

Iran’s Rouhani Warns Of Greater Hardship Than War Years Of 1980s (R.)

Iran’s president, Hassan Rouhani, has called for unity among political factions to overcome conditions that he said may be harder than those during the 1980s war with Iraq, state media reported, as the country faces tightening US sanctions. Donald Trump on Thursday urged Iran’s leaders to talk with him about giving up their nuclear programme and said he could not rule out a military confrontation. The president increased economic and military pressure on Iran, moving to cut off all Iranian oil exports while beefing up the US navy and air force presence in the Gulf. Washington also approved a new deployment of Patriot missiles to the Middle East, a US official said on Friday.


“Today, it cannot be said whether conditions are better or worse than the (1980-88) war period,” Rouhani said, according to the state news agency IRNA. “But during the war we did not have a problem with our banks, oil sales or imports and exports, and there were only sanctions on arms purchases. “The pressures by enemies is a war unprecedented in the history of our Islamic revolution … but I do not despair and have great hope for the future and believe that we can move past these difficult conditions provided that we are united,” Rouhani told activists from various factions.

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“.. he reserves the right to invite foreign military actions in the way independence hero Simon Bolivar hired 5,000 British mercenaries to liberate South America from Spain. “:

Guaido Seeks Pentagon Cooperation In Attempt To Take Power (AP)

Venezuelan opposition leader Juan Guaido on Saturday said he has instructed his political envoy in Washington to immediately open relations with the US military, in an attempt to put more pressure on President Nicolás Maduro to resign. Guiado said he had asked Carlos Vecchio, who the US recognizes as ambassador, to open “direct communications” toward possible military “coordination”. The remarks, at the end of a rally, were Guaido’s strongest public plea yet for greater US involvement in the country’s fast-escalating crisis. While Guaido has repeatedly echoed comments from the Trump administration that “all options” for removing Maduro are on the table, few in the US or Venezuelan opposition view military action as likely. Nor has the White House indicated it is seriously considering such a move.


[Guaido] announced on Saturday a forthcoming meeting with US military officials and said new actions will seek to “achieve the necessary pressure” to put an end to the Bolivarian revolution launched 20 years ago by the late socialist president Hugo Chávez. Guaido has said that as Venezuela’s rightful leader he reserves the right to invite foreign military actions in the way independence hero Simon Bolivar hired 5,000 British mercenaries to liberate South America from Spain. He says any such help should be considered “cooperation” instead of intervention, something he has accused Maduro of allowing in the form of military and intelligence support from Cuba and Russia. [..] Noticeably diminished crowds at opposition protests reflect demoralization that has permeated Guaido’s supporters after he led a failed military uprising on 30 April. In previous months, thousands heeded his calls to protest. On Saturday, a modest crowd of several hundred gathered in Caracas.

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Lock ’em up.

Boeing Altered Key Switches In 737 MAX Cockpit (ST)

In the middle of Boeing 737 cockpits, sitting between the pilot seats, are two toggle switches that can immediately shut off power to the systems that control the angle of the plane’s horizontal tail. Those switches are critical in the event a malfunction causes movements that the pilots don’t want. And Boeing sees the toggles as a vital backstop to a new safety system on the 737 MAX – the Maneuvering Characteristics Augmentation System (MCAS) – which is suspected of repeatedly moving the horizontal tails on the Lion Air and Ethiopian Airlines flights that crashed and killed a total of 346 people. But as Boeing was transitioning from its 737 NG model to the 737 MAX, the company altered the labeling and the purpose of those two switches.

The functionality of the switches became more restrictive on the MAX than on previous models, closing out an option that could conceivably have helped the pilots in the Ethiopian Airlines flight regain control. Boeing declined to detail the specific functionality of the two switches. But after obtaining and reviewing flight manual documents, The Seattle Times found that the left switch on the 737 NG model is capable of deactivating the buttons on the yoke that pilots regularly press with their thumb to control the horizontal stabilizer. The right switch on the 737 NG was labeled “AUTO PILOT” and is capable of deactivating just the automated controls of the stabilizer. On the newer 737 MAX, according to documents reviewed by The Times, those two switches were changed to perform the same function – flipping either one of them would turn off all electric controls of the stabilizer.

That means there is no longer an option to turn off automated functions – such as MCAS – without also turning off the thumb buttons the pilots would normally use to control the stabilizer. Peter Lemme, a former Boeing flight-controls engineer who has been closely scrutinizing the MAX design and first raised questions about the switches on his blog, said he doesn’t understand why Boeing abandoned the old setup. He said if the company had maintained the switch design from the 737 NG, Boeing could have instructed pilots after the Lion Air crash last year to simply flip the “AUTO PILOT” switch to deactivate MCAS and continue flying with the normal trim buttons on the control wheel.

He said that would have saved the Ethiopian Airlines plane and the 157 people on board. “There’s no doubt in my mind that they would have been fine,” Lemme said.

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“..authorities have made clear to his visitors that, if they speak with the media about the conditions of Assange’s imprisonment, those conditions will only worsen.”

Assange’s Prison Conditions (Press Project)

ThePressProject has obtained exclusive information about Julian Assange’s prison conditions. According to that information, Assange appeared in court without having been granted prior counsel from an attorney. He has access to one book, the Bible, and is not permitted access to writing materials. He is being held in solitary confinement 23 hours a day and his visitors have been made aware that conditions will worsen if they are publicized. Assange has been held at Belmarsh Prison, a Category A (i.e. high security) facility since April 11.

Both Assange’s imprisonment at Belmarsh and his 50-week sentence have been condemned in a statement issued by the UN Working Group on Arbitrary Detention, which denounced the “disproportionate treatment imposed on Mr. Assange” and claimed that his “treatment appears to contravene the principles of necessity and proportionality envisaged by the human rights standards.” Following a visit to Assange in Belmarsh earlier this week, UN Special Rapporteur on torture Nils Melzer also expressed concerns that his rights were being violated. Assange is permitted one hour a day outside of solitary confinement, during which he is allowed to bathe, walk, and use a telephone. At this moment the attention of the international community is upon him, with calls being issued by the United Nations and expressions of support coming from all over the world.

Nevertheless, Assange was permitted to appear in court without prior counsel from an attorney; currently, his meetings with a lawyer are limited to three hours per week. Not only is he cut off from communication with the outside world, he is also not allowed access to books other than the Bible. Because he is not granted access to writing materials, he keeps notes in the margins of that Bible. Again, authorities have made clear to his visitors that, if they speak with the media about the conditions of Assange’s imprisonment, those conditions will only worsen. It is clear that, in this case of such an intense struggle against so unequal an opponent and with extradition to the United States a real possibility, the provision of a fair trial and access to adequate legal defense are a matter of life and death for the imprisoned Assange.

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I see a headline like this, I immediately think: obesity. But there’s more tragedy behind this.

American Mom Today 50% More Likely To Die In Childbirth Than Her Own Mother (AP)

Pregnancy-related deaths are rising in the United States and the main risk factor is being black, according to new reports that highlight racial disparities in care during and after childbirth. Black women, along with Native Americans and Alaska natives, are three times more likely to die before, during or after having a baby, and more than half of these deaths are preventable, Tuesday’s report from the Centers for Disease Control and Prevention concludes. Although these deaths are rare — about 700 a year — they have been rising for decades. “An American mom today is 50% more likely to die in childbirth than her own mother was,” said Dr. Neel Shah, a Harvard Medical School obstetrician.


Separately, the American College of Obstetricians and Gynecologists released new guidelines saying being black is the greatest risk factor for these deaths. The guidelines say women should have a comprehensive heart-risk evaluation 12 weeks after delivery, but up to 40% of women don’t return for that visit and payment issues may be one reason. Bleeding and infections used to cause most pregnancy-related deaths, but heart-related problems do now. The CDC report found that about one third of maternal deaths happened during pregnancy, a third were during or within a week of birth, and the rest were up to a year later. Globally, maternal mortality fell about 44% between 1990 and 2015, according to the World Health Organization. But the U.S. is out of step: Moms die in about 17 out of every 100,000 U.S. births each year, up from 12 per 100,000 a quarter century ago.

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Feb 052019
 
 February 5, 2019  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , , , , ,  


René Magritte Meditation 1936

 

How Much Could Negative Rates Have Helped the US Recovery? (FRBSF)
Bill Gross Retires (R.)
SOTU (Jim Kunstler)
EU Goods Will Be Waved Through British Ports In Case Of No Deal Brexit (Sun)
Nissan Was Offered Secret UK State Aid To Cope With Brexit (G.)
Merkel Says ‘Still Time’ To Find Brexit Solution (AFP)
An Italian Debt Crisis Could Take Down The EU (ZH)
Australia Central Bank Stays Calm As Shoppers Go Missing (R.)
Recognising Juan Guaidó Risks A Bloody Civil War In Venezuela (Ponceleon)
The Venezuelan Coup and Gilets Jaunes: Great-Power Politics (Pieraccini)
Italy Vetoes EU Recognition Of Venezuelan Opposition Leader Guaido (RT)
Twitter Erupts After 2,000 Pro-Venezuelan Accounts Are Deleted (Telesur)

 

 

As Trump has dinner with Powell, some San Francisco Fed theorist waxes enthusiastically about what more the Fed could have done. Not pre-2008, when the crisis caused by Fed policies erupted, but post-2008, when it tried to repair the damage it had done -and ‘failed’. Get these guys out of your economy or you’re going to see a real crisis. The Fed serves rich people only. All these people claim to defend a free market, but the Fed is the biggest enemy of a free market.

How Much Could Negative Rates Have Helped the US Recovery? (FRBSF)

The Federal Reserve responded aggressively to the most recent financial crisis and the Great Recession of 2007-2009 by cutting the target for its benchmark short-term interest rate, known as the federal funds rate, to a range just above zero in December 2008, where it stayed until the end of 2015. Traditionally, it has been assumed that nominal interest rates cannot fall below zero, known as the “lower bound.” Ever since 2008, researchers have debated how much monetary policy was constrained by this lower bound and how much it affected economic outcomes. To work around this constraint, the Federal Reserve turned to unconventional monetary policy tools such as forward guidance and large-scale asset purchases.

Other central banks—in Switzerland, Sweden, Japan, and the euro area—took unconventional policy one step further and challenged the traditional view on the lower bound by setting their target rates below zero. In this Economic Letter, I consider whether pushing rates below zero would have improved economic outcomes in the United States in the aftermath of the financial crisis. Model estimates suggest that reducing the effective lower bound for the federal funds rate to –0.75% would have reduced economic slack by as much as one-half at the trough of the recession and sped up the ensuing recovery. While the boost to the economy would have been negligible after 2014, inflation would have been higher throughout the recovery by about half a percentage point on average.

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Alternative headline: Fed policies killed Bill Gross. Can’t support stocks without killing bonds. It’s about pensions, don’t you know.

Bill Gross Retires (R.)

Bill Gross, once the bond market’s most influential investor, will retire from Janus in coming weeks, ending attempts to reclaim the stature he enjoyed leading the world’s largest fixed-income investing firm. Gross, who turned to investing after serving as U.S. naval officer, co-founded Pacific Investment Management Co in 1971, attaining rock-star status in investing circles as he attracted hundreds of billions of dollars in assets. Under his watch, Pimco blossomed into a $2 trillion asset-management powerhouse, one so influential that the U.S. Federal Reserve tapped it to help implement its program of emergency bond purchases in the financial crisis in 2008. At Janus, however, Gross was unable to repeat his earlier success, with the performance of the fund he managed ranking near the bottom. Gross told Reuters on Friday that low rates are distorting returns.

His tenure at Pimco ended abruptly and acrimoniously in September 2014, when he was ousted. His flagship Total Return Fund – which hit a peak of $292.9 billion in assets in April 2013 – was hemorrhaging assets. At the end of April 2015, the Pimco Total Return Fund had lost its title as the world’s biggest bond mutual fund to the Vanguard Total Bond Market Index Fund, which had $117.3 billion of assets. “You have to give Bill a lot of credit because he was the prime mover, popularizing active management,” Dan Fuss, vice chairman at Loomis, Sayles & Co LP, and one of Gross’ biggest competitors, said in a telephone interview. “I had hoped he’d be out and about and stay in the business because I know he would have wound up doing a good job.”

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Here’s hoping he rips them all another one. That the SOTU may be as exciting as the Super Bowl was dull.

SOTU (Jim Kunstler)

It’s conceivable, in a nation that absolutely can’t make sense of itself, that Mr. Trump’s annual report to congress will be as incomprehensible as this year’s Superbowl halftime show. Even the weather in Atlanta was a complete mystery with Maroon 5’s front man, Adam Levine, capering half-naked in tattoo drag amid artificial fires-of-hell, and then local hero rapper Big Boi’s triumphal entry in a limo, nearly lost inside what looked like the pelt of a giant ground sloth — an eight-year-old’s idea of what it means to be important. Or maybe it was just all code for two sides of the climate change debate. You can be sure the atmosphere will be frosty to the max when the Golden Golem of Greatness lumbers down the aisle of congress’s house on Tuesday night.

I wouldn’t be surprised if the Democratic majority turns its backs on him during the always excruciating preliminaries and then just walks out of the chamber. Don’t expect the usual excessive rounds of applause from the president’s own party this time, either, in the big, half-empty room. They don’t know what to do about him at this point… or what to do with themselves, for that matter. The running theme for State of the Union (SOTU) messages going back to Ronald Reagan is American Wonderfulness, so expect at least forty minutes of national self-esteem therapy, which nobody will believe. Throw in another ten minutes of elevating sob stories about “special guests” up in the galleries. But leave a little time for Mr. Trump to roll a few cherry bombs down the aisles. He must be good and goddam sick of all the guff shoveled at him for two years.

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Smugglers rejoice!

EU Goods Will Be Waved Through British Ports In Case Of No Deal Brexit (Sun)

GOODS shipped to Britain from the EU are to be waved through 20 UK ports without checks in a No Deal to avoid huge jams – HMRC has declared. In official advice released today, HM Revenue & Customs said that “for a temporary period” it would allow “most” shipments into the country before companies have even informed them they’ve arrived. Exporters would have just over 24 hours to then fill in an electronic declaration. The revelation comes just months after HMRC bosses warned the UK’s post-Brexit customs system would not work properly for two years in a No Deal. HMRC chief John Thompson told MPs last year that the Government would have a choice to make – whether to keep trade moving, ensure security at the border, or collect revenues.

Insiders said it appeared that HMRC had decided it was essential to keep trade moving rather than risk huge queues on the way to ports such as Dover or at Eurotunnel terminals. Hauliers have been furious at the lack of guidance from HMRC and the Government over how the customs system would work in the event of a No Deal. Today’s “updated guidance” warns that anyone importing into Brexit Britain will have to fill out a customs form before checking goods onto a ferry or train on the EU side. But it adds: “For a temporary period, HMRC will allow most goods moving from the listed roll on roll off locations to leave the UK port or train station before you’ve told us that the goods have arrived.”

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What other secret plans are there?

Nissan Was Offered Secret UK State Aid To Cope With Brexit (G.)

The business secretary has been forced to admit the existence of a previously secret package of state aid to Nissan that could have been worth up to £80m had the carmaker gone ahead with plans to manufacture a new model X-Trail in Sunderland after Brexit. Greg Clark released a letter dated October 2016 in which he pledged tens of millions of taxpayer support and promised the Japanese company it would not be “adversely affected” after the UK left the EU. Yet, at the time the commitments were first made, Downing Street had said “there was no special deal for Nissan” and Clark refused six times to answer a question about what was on offer when interviewed on the BBC. He even appeared to suggest no money was involved. Asked on BBC One’s Question Time about the deal, he said: “There’s no chequebook. I don’t have a chequebook.”

Clark and the government had repeatedly refused to release the 2016 letter until the promises turned out to be worthless, because Nissan had abandoned its future investment plan, partly because of uncertainty over Brexit. The four-page document, sent by Clark to Nissan’s then chief executive, Carlos Ghosn, committed the government to “a package of support in areas such as skills, R&D and innovation” which “could amount to additional support of up to £80m”. The state aid package ultimately turned out to be worth £61m when it was formally awarded to Nissan in June 2018, a fact only acknowledged by Clark in a second letter sent on Monday to the Labour MP Rachel Reeves, who chairs the business select committee.

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Merkel seems to open a door just to slam it shut again the next instant.

“..she was clear that any solution could only come via the political declaration attached to the withdrawal agreement – rather than re-opening talks on the actual exit deal.”

Merkel Says ‘Still Time’ To Find Brexit Solution (AFP)

There is still time to find a solution to Britain’s exit from the EU, German Chancellor Angela Merkel said Tuesday, voicing optimism on a political deal over the tricky “backstop” that has stymied progress. Speaking to Japanese and German business leaders in Tokyo, Merkel stressed that “on the one hand, time is pressing” and businesses using “just-in-time” delivery processes could not afford lengthy customs procedures. However, she added: “From a political point of view, there is still time. Two months is not a long time but there is still time, and this should be used by all sides.” Britain is poised to leave the EU at the end of March following a 2016 referendum. Merkel acknowledged the issue of the unpopular Northern Ireland backstop provision was “complicating” Brexit talks.

The backstop is intended to ensure there is no return to a hard border with Ireland, but Brexit supporters fear it will keep Britain tied to EU customs rules. She said the issue with the backstop was a “problem that is precisely defined and therefore one should be able to find a precisely defined solution”. “But this solution depends on the question of what the future relationship between Britain and the EU will be like and what type of trade deal we sign with each other,” added the chancellor. Throwing the ball into London’s court, she stressed: “It will be very important for us to know what exactly the British side sees as its future relationship with the EU.” [..] she urged “creativity” and “goodwill” to find a solution. However, she was clear that any solution could only come via the political declaration attached to the withdrawal agreement – rather than re-opening talks on the actual exit deal.

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French banks. And Wall Street.

An Italian Debt Crisis Could Take Down The EU (ZH)

Plagued by another run of bank bailouts and simmering tensions between the partners in its ruling coalition, Italy’s brief reprieve following the detente between its populist rulers and angry bureaucrats in Brussels is already beginning to fade. As Bloomberg reminded us on Monday, Italy’s $1.7 trillion pile of public debt – the third largest sovereign debt pool in Europe – is threatening to set off a chain reaction that could hammer banks from Rome, to Madrid, to Frankfurt – and beyond. Just the mention of the precarity of Italian debt markets “can induce a shudder of financial fear like no other” in bureaucrats and businessmen alike – particularly after Italy’s economy slid into a recession during Q4. While much of Italy’s debt burden is held by its banks and private citizens, lenders outside of Italy are holding some €425 billion ($486 billion) in public and private debt.

The Bloomberg analysis of Italy’s financial foibles follows more reports that Italy’s ruling coalition between the anti-immigrant, pro-business League and the vaguely left-wing populist Five-Star Movement has become increasingly strained. Per BBG, the two parties are fighting a battle on two fronts over the construction of a high speed Alpine rail and a legal case involving League leader Matteo Salvini over his refusal to let the Dicotti migrant ship to dock in an Italian port last summer. After M5S intimated that it could support the investigation, the League warned that such a move would be tantamount to “blackmail” against Salvini, whose lieutenants have been pushing for him to take advantage of the party’s rising poll numbers and push for early elections later this year. However, Salvini has rebuffed these demands, warning that there’s nothing stopping Italian President Sergio Mattarella from calling for a new coalition instead of new elections.

[..] To keep operating without massive budget cuts (something neither party in the ruling coalition has shown any sign of supporting) Italy must sell 400 billion euros ($457 billion) of debt per year. But since Italy’s banks hold so much of the country’s debt, declines in the price of Italian bonds inevitably hurts the shares of Italian banks, and also forces them to hold more capital on their books to ensure liquidity from the ECB. This creates the potential for a negative feedback loop known as the “doom loop”. Put another way, “a government crisis could drag down the banking system or a banking crisis could suck in the government.”

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And the Chinese withdraw.

Australia Central Bank Stays Calm As Shoppers Go Missing (R.)

Australia’s central bank warned of risks to growth on Tuesday but wrongfooted rate bears by steering clear from an explicit easing signal, even as data showed shoppers slashed spending during Christmas in another sign of cooling economic momentum. The Reserve Bank of Australia (RBA) left rates at a record low 1.50 percent for a 30th straight month, saying accommodative policy was supporting the economy and that further progress was expected in reducing unemployment and lifting inflation over time. The local dollar jumped as the statement sounded less dovish than the markets had wagered on.

“The main message from the RBA today was that they are still positive on the growth outlook, and particularly on the labor market, and they see the economy as still on track towards lifting inflation back to their target,” said HSBC Australia’s chief economist Paul Bloxham. Yet, interest rates futures continued to price in a 50-50 chance of a rate cut by the end of the year, reflecting the deteriorating growth momentum in the face of rising global and domestic risks. Lowe expects Australia’s A$1.8 trillion economy ($1.3 trillion) to expand at an above-trend rate of around 3 percent this year. That is a slightly more cautious view compared to “a little above 3 percent” in its previous statement.

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Temir Porras Ponceleon was chief of staff to Nicolás Maduro from 2007 to 2013. He is now a visiting professor at Sciences Po, Paris.

Stangely missing from this piece: the CIA.

Recognising Juan Guaidó Risks A Bloody Civil War In Venezuela (Ponceleon)

Falsely presented as a “fresh face”, Guaidó first came to prominence in 2007, as a member of a generation of students who led protests against Chávez’s socialism, despite his landslide presidential victory in 2006. Guaidó is part of an opposition that never stopped challenging Chávez’s popular legitimacy even in his heyday, and who naturally doubled down as soon as the less assertive Maduro took office. The challenges to Maduro’s legitimacy began the moment he was elected. His presidential opponent, Henrique Capriles, labelled the 2013 election a fraud (without providing any supporting evidence). Capriles called on his followers to ventilate their “anger” in the streets, a move resulting in the killing of a number of Chavistas.

In January 2014 Guaidó’s political party, Voluntad Popular, launched a nationwide insurrectionary movement aimed at forcing Maduro out of office. This was only nine months into Maduro’s term, and long before the country faced any serious economic or social problems. In fact, in early 2014 oil prices were at record highs, and Venezuelans were still enjoying their highest levels of income ever, in terms of GDP per capita. [..] And then oil prices collapsed in June 2014, leaving an ill-prepared country frozen in inaction. Living standards started to deteriorate, and while a Maduro-led Chavismo remained a large and organised political force, it lost its dominance. Maduro suffered a humiliating defeat in the December 2015 legislative elections, which allowed an opposition coalition to seize a potentially devastating two-thirds supermajority in the national assembly.

[..] Unless the international community is willing to risk a needless war on the American continent, it must urgently create conditions for a national dialogue aimed at reaching a political agreement. [..] The idea that Maduro has managed to remain in office during the past six years solely through corruption and the use of force is a gross misrepresentation. It ignores that, beyond the president, the Chavismo social movement counts millions of supporters, primarily from lower-income communities, and is strongly embedded within the Venezuelan military.

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“The protests seen in France and the interference in the domestic politics of Venezuela highlight Western double standards, which stand in contrast to the respect for international law maintained by China, India and Russia.”

The Venezuelan Coup and Gilets Jaunes: Great-Power Politics (Pieraccini)

In France on November 17, 2018, hundreds of thousands of citizens, angered by the diminishing quality of their lives, the social iniquity in the country, and the widening gap between rich and poor, took to the streets in protest. The protests can easily be encapsulated in the following slogan: “We the people against you the elite.” This slogan has been a recurring theme throughout the West over the last three years, shaking up the British establishment with the pro-Brexit vote, discombobulating the United States with Trump’s victory, overturning Italy with the Lega/Five-Star government, and bringing Merkel’s star crashing down in Germany.

Now it is the turn of Macron and France, one of the least popular leaders in the world, leading his country into chaos, with peaceful protests drawing a bloody response from the authorities following ten weeks of unceasing demonstrations. In Venezuela, Western elites would like us to believe that the situation is worse than in France in terms of public order, but that is simply a lie. It is a media creation based on misinformation and censorship. In Europe, the mainstream media has stopped showing images of the protests in France, as if to smother information about it, preferring to portray an image of France that belies the chaos in which it has been immersed for every weekend over the last few months.

In Caracas, the right-wing, pro-American and anti-Communist opposition continues the same campaign based on lies and violence as it has customarily conducted following its electoral defeats at the hands of the Bolivarian revolution. The Western mainstream media beams images and videos of massive pro-government Bolivarian rallies and falsely portrays them as anti-Maduro protests. We are dealing here with acts of journalistic terrorism, and the journalists who push this narrative, instigating clashes, should be prosecuted by a criminal court of the Bolivarian people in Caracas.

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Good on them. All these EU countries don’t deem it needed to explain why they do it, other than: Maduro is a dictator. Well, his approval rating is higher than any of theirs.

Italy Vetoes EU Recognition Of Venezuelan Opposition Leader Guaido (RT)

Rome has effectively derailed an EU statement meant to recognize Juan Guaido as Venezuela’s interim leader if President Nicolas Maduro fails to set up snap elections, a Five Star Movement source confirmed to RT. Italy announced the veto at an informal meeting of EU foreign ministers that started on January 31 in Romania, the source said. The statement, which was supposed to be delivered by EU foreign affairs chief Federica Mogherini recognized Guaido as interim president if snap elections were not held. The European Parliament is the first European body to recognize Guaido “as the only legitimate interim president of the country until new free, transparent and credible presidential elections can be called in order to restore democracy.”

The parliament urged the EU to follow suit but the effort stalled due to internal discord. A range of European nations have separately recognized the opposition chief as Venezuela’s acting president, including the UK, France, Sweden, Spain, and Austria. The coordinated move came after an eight-day deadline for Maduro to call presidential elections expired on Monday. The US announced that it is backing the new interim leader and pledged their full support immediately after what has been labeled “a coup” by officials in Caracas. However Russia, China, Turkey and Iran said they see Maduro as the only legitimate leader, warning against meddling in Venezuela’s domestic affairs.

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Orwell.

Twitter Erupts After 2,000 Pro-Venezuelan Accounts Are Deleted (Telesur)

Nearly 2,000 pro-Venezuelan Twitter accounts have been removed for “engaging in a state-backed influence campaign,” the social media company said in a blog post on Thursday. A total of 1,196 social media accounts based in Venezuela suspected of attempting to “influence domestic audiences” were purged last week. Another 764 accounts were deleted, although the San Francisco-based company told users, “We are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country.” Allegations of censorship soon filled the site’s timeline.

Television host for the investigatory series, Empire Files, Abby Martin tweeted, “While pro-coup Venezuelans & right-wing exiles dominate the media sphere, tech companies are actively censoring pro-government accounts they say are working to “influence” people.” Another journalist, Ben Norton, accused the company of catering to “U.S. government interests:” Twitter is now removing thousands of accounts supposedly linked to Venezuela’s sovereign government. This comes after Twitter suspended Venezuelan government accounts 1.5 years ago. Social media corporations act as an extension of US government interests.” In another blog post, Twitter announced the release of five new datasets which were allegedly created in relation to suspected foreign interference efforts it had encountered.

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Jan 252019
 
 January 25, 2019  Posted by at 10:59 am Finance Tagged with: , , , , , , , , , , , ,  


Giuseppe Arcimboldo Four elements – Fire 1566

 

Trump, Pence, Pompeo Star In The Pirates Of The Caribbean (Galloway)
US Pulls Out Venezuela Staff, Urges Americans to Leave (G.)
Venezuela’s Juan Guaidó Offers Nicolás Maduro Amnesty If He Goes Quietly (G.)
US Seeks To Divert Crucial Oil Revenue From Maduro (Ind.)
Don’t Criticize Trump — We Need Him, Dutch Prime Minister Says (CNBC)
UK Firms Ramp Up Stockpiling Due To Brexit Disruption Fears (Ind.)
UK MPs Drop Plan To Table Cross-Party ‘People’s Vote’ Amendment (G.)
The Financial Secret Behind Germany’s Green Energy Revolution (Ellen Brown)
Davos Elites Fear They’re On A Toboggan Ride To Hell (Pol.eu)
CO2 Levels Expected To Rise Rapidly In 2019 (Ind.)

 

 

Yes, Jimmy Carter once called Venezuela’s election process “the best in the world” when he was there as an observer. But in March 2018, the opposition called on the UN not to send any observers as that would only legitimize the process. So now the US picks an unelected puppet.

Trump, Pence, Pompeo Star In The Pirates Of The Caribbean (Galloway)

Even though Chavez was one of the most electorally successful politicians on the planet in a democratic process described by former US president Jimmy Carter as “the best in the world,” US presidents Bush, Obama and Trump routinely called him a dictator. Before they drop the bombs, they drop the narrative, of course. And the disinformation bombardment in Venezuela has been one of the longest bombing runs in history. Massive sums of US money have been spent on media distortion, subversion, sabotage, military coups, and threats of invasion throughout the Chavez-Maduro era. The gold-toothed Venezuelan emigres who fled to Miami with their ill-gotten gains have long been effectively a coup in the making.

The recruitment of neighboring Colombia into “associate membership” of NATO, the propeling of Brazil’s Bolsonaro (another NATO applicant) to power, and plans for US military bases there have all been in preparation for this day. Although many such crimes have been committed across all continents for centuries by the US, none have constituted such comic-opera gangsterism as this latest – more ‘Bugsy Malone’ than ‘The Godfather.’ An almost random figure whose name was largely unknown until this week has disdained to put himself up for election as president of the republic, instead pronouncing himself to actually be the president, and has even sworn himself in! All the “experts” on Syria, Ukraine and Russia are scrambling to studios, practicing in the taxi how to say his name.

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Most Americans would be working in the oil industry. Sure, let them leave. And then watch prices at the pump.

US Pulls Out Venezuela Staff, Urges Americans to Leave (G.)

The US state department has urged its citizens to “strongly consider” leaving Venezuela and ordered out non-emergency government staff as the head of the country’s armed forces warned of a civil war sparked by a US-backed “criminal plan” to unseat Nicolás Maduro. In a live address to the nation on Thursday, the defence minister, Vladimir Padrino, accused the Venezuelan opposition led by Juan Guaidó, the United States and regional allies such as Brazil of launching an attempted coup against Maduro that risked bringing “chaos and anarchy” to the country. “We are here to avoid, at all costs … a conflict between Venezuelans. It is not civil war, a war between brothers that will solve the problems of Venezuela. It is dialogue,” said Padrino.

In a significant blow to Venezuela’s newly energized opposition, the defence minister declared unwavering support for “our commander-in-chief, the citizen Nicolás Maduro”. “We members of the armed forces know well the consequences [of war], just from looking at the history of humanity, of the last century, when millions and millions of human beings lost their lives,” Padrino added, flanked by the top brass of Venezuela’s armed forces. Further bolstering Maduro’s position, the Russian president, Vladimir Putin, spoke to the Venezuelan leader by telephone and issued his first comments on the crisis, which he insisted was “provoked from abroad”, according to a Kremlin statement.

On Thursday night, Guaidó used his first TV interview since the crisis to offer Maduro and his inner circle amnesty if they agreed to a peaceful transition. The 35-year-old said he was determined to bring Maduro’s “dictatorship” to an end, stabilise his economically devastated nation and organise free elections “as soon as possible”.

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He went into hiding before making his offer. C’mon, let’s get serious. A mini-coup failed miserably, the army stands pat, time for a fresh story to fill the papers.

Venezuela’s Juan Guaidó Offers Nicolás Maduro Amnesty If He Goes Quietly (G.)

Venezuela’s embattled president, Nicolás Maduro, and his inner circle could be granted an amnesty if he agrees to relinquish power and submit to a peaceful political transition, his opposition challenger Juan Guaidó has said. In a high-stakes political gamble, Guaidó on Wednesday declared himself Venezuela’s legitimate interim president and was quickly recognised as such by powers including the United States, Brazil, Canada and Colombia. On Thursday British foreign secretary, Jeremy Hunt, said his government believed Guaidó was “the right person to take Venezuela forward” but China, Russia and Turkey all backed Maduro, who claims he is the victim of a coup attempt masterminded by the US. The US state department has now urged US citizens to “strongly consider” leaving Venezuela and ordered out non-emergency government staff.

[Guaidó] indicated Maduro – who was sworn in for his second six-year term on 10 January despite a storm of international condemnation – could himself be offered an amnesty if he agreed to step aside. “This amnesty, these guarantees are on the table for everyone who is prepared to put themselves on the side of the constitution in order to recover the democratic order,” he said. “In periods of transition similar things have happened [before],” Guaidó told the broadcaster Univisión, pointing to previous pardons in Chile and Venezuela in the 1970s and 1950s. “We cannot discount any element,” he added, insisting that such a move would not represent either impunity or forgetting.

Maduro – who has vowed to resist what he calls a “gringo” plot to unseat him – has given little public hint he will accept such an offer although addressing the supreme court in Caracas on Thursday he insisted: “I’m ready for dialogue, for understanding, for negotation, for agreement.” However, in the same speech Maduro also attacked Guaidó, accusing him of being a pawn in a US-backed plot to destroy the leftist Bolivarian revolution he inherited after Hugo Chávez’s death in 2013. “Will we legitimise a puppet government imposed from abroad? We will allow our constitution to be violated … ? No!” said Maduro, blaming what he branded an attempted coup on Donald Trump’s “madness”.

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See what I said on CITGO yesterday.

US Seeks To Divert Crucial Oil Revenue From Maduro (Ind.)

Mr Trump’s national security adviser, the hawkish John Bolton, revealed the US was seeking to ensure Venezuelan oil revenue goes to Mr Guaido, and not Mr Maduro, who was sworn in for a second term just two weeks ago following an election most of the opposition boycotted. If the US were able to enact such a move it would add further pressure to the embattled Venezuelan leader, whose country’s already ailing economy heavily depends on its oil revenues. “What we’re focusing on today is disconnecting the illegitimate Maduro regime from the sources of his revenues,” Mr Bolton told reporters at the White House, according to Reuters. “We think [it is] consistent with our recognition of Juan Guaido as the constitutional interim president of Venezuela that those revenues should go to the legitimate government.”

Of potentially vital importance, earlier on Thursday, the nation’s military leadership declared its support for Mr Maduro and told the US not to interfere. In a televised speech on Thursday, defence minister Vladimir Padrino Lopez said Mr Maduro was the country’s “legitimate president” and that the opposition was seeking to carry out a “coup”. “I warn the people that there is a coup underway against our democracy and our president Nicolas Maduro,” Mr Padrino said, according to Telesur. “As soldiers, we work for peace and not for war.” He added: “Those of us who lived through the coup of 2002 have it etched into our minds, we never thought we’d see that again, but we saw it yesterday.

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Rutte’s been in office for so long he gets to have an own view.

Don’t Criticize Trump — We Need Him, Dutch Prime Minister Says (CNBC)

President Donald Trump has found support from an unlikely source in Europe — Dutch Prime Minister Mark Rutte — who told CNBC that the president could be a catalyst for much-needed reforms. “The U.S. has voted and Trump is the president and maybe he will be re-elected … So we have to work with him, and I think he is an opportunity,” Rutte told CNBC’s Geoff Cutmore at the World Economic Forum in Davos, Switzerland. “He is an opportunity to make changes to some of those multilateral institutions that we hold dearly, like the World Trade Organization (WTO) which is not functioning very well. Or take the United Nations or European Union — there are many issues to solve,” he added.

“So my point would be instead of thinking ‘oh we would have liked Hillary Clinton to win,’ or ‘I wish (former President Barack) Obama was still there,’ but guys Trump is president, make use of his presidency and his critique of those international institutions is sometimes very valid.” Trump has made himself unpopular in most European circles for his criticism of hallowed, well-established institutions such as the NATO and the WTO (Trump threatened to pull the U.S. out of both) and the European Union (which Trump said was formed in order to take advantage of the U.S. in terms of trade). He has also threatened to impose tariffs on European goods and cars; hardly the policies that would make most liberal politicians, like Mark Rutte, warm to Trump. “In this world, international structures are absolutely necessary, but sometimes it vexes me when I hear the white wine-sipping elite in Amsterdam saying ‘Trump is very wrong,'” Rutte said

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Sounds very late. 9 weeks left?!

UK Firms Ramp Up Stockpiling Due To Brexit Disruption Fears (Ind.)

UK companies have ramped up stockpiling ahead of Brexit as export opportunities for manufacturers weakens, according to new research from Lloyds Bank. The lender’s international trade index shows that export growth fell to its weakest level in almost three years in the fourth quarter of 2018. Exports of consumer goods held up well, Lloyds said, but the transport sector was hit by changing emissions regulations and new rules about diesel vehicles. Exports in the service sector fell in the last three months of 2018, bringing to an end three four years of growth.

Political uncertainty at home and abroad, along with weakening economic growth in key markets, were cited as the drivers for the export downturn. Meanwhile, the data showed that UK manufacturers had increased stockpiling efforts over recent months due to the threat of shortages and disruption posed by Brexit. The UK Manufacturing PMI Index for purchases of stocks jumped up to 53.7 for the month of December, from 51.1 in the previous month. Gwynne Master, managing director and global head of trade for Lloyds Bank Global Transaction Banking, said: “We should be mindful of the impact of fluctuating trading conditions and global and domestic political uncertainty on the UK’s exporters.

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The only thing that really made sense. Because it breaks party lines. Gone.

UK MPs Drop Plan To Table Cross-Party ‘People’s Vote’ Amendment (G.)

A cross-party amendment to push for a second EU referendum will not be tabled in the Commons as it would have little chance of being passed without formal support from Labour, the MPs organising it have announced. Sarah Wollaston, the Conservative MP who has led efforts on a so-called “people’s vote” amendment, said that without the backing of Jeremy Corbyn, “at the moment we would not have the numbers”. However, the Liberal Democrats have tabled a similar amendment and have called for Labour to back the idea. Speaking outside parliament alongside the Labour MPs Luciana Berger and Chuka Umunna, Wollaston urged Corbyn to think again. “We would like to appeal again to him to give his unequivocal backing to a people’s vote, in which case we could make progress,” she said.

Labour has not ruled out supporting a second referendum and the party is keeping its options open. There is disquiet among some of its MPs and shadow ministers that backing such an option could anger leave-backing Labour voters. Wollaston argued that a second referendum was still the best option to end the Brexit deadlock. “People have a right to change their minds, and the mandate from the first referendum – over two years ago and based on entirely unrealistic promises and outright lies – has expired.” But without Labour backing, she said, “that amendment could not pass, and so with great regret we will not be laying that amendment”.

Berger said that with 30 scheduled Commons sittings left before the current Brexit date, there was “an urgent need for leadership”. “Regrettably, the Labour leadership won’t commit to an achievable policy,” she said. “And yet we know that the majority of Labour voters, supporters and members want a final say on any Brexit deal. At a time when Labour should be championing a people’s vote, the leadership avoids answering that call.”

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That revolution is overhyped, but the US and German public bank story is good.

The Financial Secret Behind Germany’s Green Energy Revolution (Ellen Brown)

KfW’s role in implementing government policy parallels that of the Reconstruction Finance Corporation (RFC) in funding the New Deal in the 1930s. At that time, U.S. banks were bankrupt and incapable of financing the country’s recovery. President Franklin D. Roosevelt attempted to set up a system of 12 public “industrial banks” through the Federal Reserve, but the measure failed. Roosevelt then made an end run around his opponents by using the RFC that had been set up earlier by President Herbert Hoover, expanding it to address the nation’s financing needs.

The RFC Act of 1932 provided the RFC with capital stock of $500 million and the authority to extend credit up to $1.5 billion (subsequently increased several times). With those resources, from 1932 to 1957 the RFC loaned or invested more than $40 billion. As with KfW’s loans, its funding source was the sale of bonds, mostly to the Treasury itself. Proceeds from the loans repaid the bonds, leaving the RFC with a net profit. The RFC financed roads, bridges, dams, post offices, universities, electrical power, mortgages, farms and much more; it funded all of this while generating income for the government.

The RFC was so successful that it became America’s largest corporation and the world’s largest banking organization. Its success, however, may have been its nemesis. Without the emergencies of depression and war, it was a too-powerful competitor of the private banking establishment; and in 1957, it was disbanded under President Dwight D. Eisenhower. That’s how the United States was left without a development bank at the same time Germany and other countries were hitting the ground running with theirs.

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Just ignore these people. They have nothing. They’re the past.

Davos Elites Fear They’re On A Toboggan Ride To Hell (Pol.eu)

Populists movements around the world, left and right, disagree in detail but are united around one big idea: The political and economic elites running modern societies are very powerful people who know what they are doing. What they are doing is often bad — greedy, exploitative, short-sighted — but they are doing it with purpose and confident control. A different possibility, however, hung in the alpine air this week at the annual convening of elites here at the World Economic Forum: These alleged masters of the universe came off nearly as perplexed and anxious about the future as the populist forces inveighing against them.

They have money. They have entourages. They have commanding views, both literal (from mountain chalets here) and metaphorical (from government offices and CEO suites back home). That doesn’t mean they have a clue. Foreboding about the future was a prevailing theme at this year’s Davos, sometimes even with dash of dystopian prophecy. This brooding was accompanied often, in speeches and interviews, by a rueful acknowledgment that government leaders are desperately improvising — often with bleak results — to meet the political crises of the moment, much less the long-term technological and climatological challenges of the age. In key Western capitals, governance is failing. China is exploiting. Global temperatures are rising.

Tech titans are groveling. Prospects for economic downturn are rumbling. Little wonder that, instead of triumphant optimism about the forces of globalization sometimes associated with Davos, some voices here made it sound like modern life is on a toboggan ride to hell. “Everybody agrees that there are dark clouds on the horizon, and there are risks,” said United Nations Secretary-General António Guterres, in an address here Thursday.

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Due to the 1,500 private jets in Davos.

CO2 Levels Expected To Rise Rapidly In 2019 (Ind.)

This year will see one of the biggest CO2 surges in more than six decades of measurements, according to the Met Office. Rising emissions due to the world’s continued appetite for fossil fuels will combine with reduced absorption of greenhouse gas by withering grasslands and forests. Describing the prediction as “worrying and compelling”, scientists said it was an urgent reminder that the time to cut out carbon is now. CO2 levels will be at a record high once again after emissions reached unprecedented levels last year, dashing hopes the world had finally hit “peak carbon”. Besides fossil fuels pumping out the harmful gas, natural weather fluctuations will exacerbate the problem as they hamper the ability of carbon sinks to store it. In 2019 an upward swing in tropical Pacific Ocean temperature will make many regions warmer and drier.

As drought sets in and plants dry out, they will be less capable of sucking CO2 from the atmosphere, and massive deforestation in places like the Amazon is making this problem even worse. The new predictions were based on monitoring at the Mauna Loa observatory in Hawaii, which has registered a 30 per cent increase in the concentration of CO2 since 1958. “Carbon sinks have saved us from what has already happened – the future rise would have been about double if it wasn’t for the sinks. So we are lucky they exist, to be honest,” Professor Richard Betts of the Met Office Hadley Centre told The Independent. “But the sinks themselves are affected by the climate, and that’s an important thing because it shows that as climate change continues in the future it may affect their strength.”


Forecast CO2 concentrations at the Mauna Loa station for 2019 (orange), along with previous forecast concentrations and the real observed data (Met Office)

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